California voters, long accustomed to living in a high-tax state, appear to be showing signs of fatigue when asked to approve new taxes and bond measures.
The shift is notable in a state dominated by Democratic voters, where support for government services has often translated into willingness to pay higher taxes. California already ranks among the nation’s highest-tax states, with steep rates on retail sales, personal income and corporate income. While property tax rates are comparatively restrained, the state’s high home values often leave property owners with substantial annual bills.
Additional taxes on fuel, utilities, tobacco, alcohol, health care, gambling, firearms and ammunition add to the overall burden. State and local governments, along with school districts, collect roughly $400 billion in taxes each year, according to the Tax Foundation. That amounts to more than $10,000 per resident, the fifth-highest per-person tax burden in the country.
The state budget now being negotiated includes several smaller tax proposals, including a new tax on managed health care services and another involving software. At the same time, local governments across California are asking voters to approve new sales taxes, parcel taxes and bond measures. The November ballot also could include several statewide tax-related proposals, some seeking to raise taxes and others designed to limit future increases.
Together, those measures will test how much more California voters are willing to pay. Recent polling and election results suggest that appetite may be shrinking.
In a May survey by the Public Policy Institute of California, 55% of voters said they preferred lower taxes and a state government that provides fewer services as a way to address ongoing state budget deficits. Even among Democrats, only 10% supported solving the state’s budget problems primarily through higher taxes, according to PPIC researcher Dean Bonner.
The results of California’s recent primary election appeared to reflect that mood. Voters considered 92 local measures that would either raise taxes directly or authorize bonds that would trigger higher property taxes to pay off the debt. The California Taxpayers Association found that 57.5% of those measures passed, a sharp drop from approval rates of about 70% in other recent elections.
The resistance was visible even in San Francisco, one of the state’s most progressive cities. Voters there rejected Proposition D, which would have increased taxes on large companies whose executives are paid at least 100 times more than their rank-and-file workers. They also turned down Proposition C, which would have raised the city’s gross receipts tax on businesses.
Other tax proposals failed in Democratic-leaning areas as well. San Diego voters rejected a new tax on vacant residential properties, and Contra Costa County voters turned down a sales tax increase. In Los Angeles County, voters approved a sales tax hike for health care, but only by a very narrow margin.
The growing hesitation may be tied to broader anxiety over California’s high cost of living, a concern felt heavily across Southern California and the Inland Empire, where household budgets have been strained by housing, transportation, insurance, utilities and grocery costs.
The same PPIC survey found that 44% of Californians considered the cost of living and the economy the state’s most important issue. Housing costs and availability ranked second at 14%. The poll also found that three in four Californians expect difficult economic times ahead, with pessimism widespread across party, regional and demographic lines.
Voters worried about their own finances are often less inclined to support measures that could raise household costs further. With more tax proposals expected in November, California will soon get another measure of just how far that reluctance may go.
Original source: CalMatters
